Updated July 11, 2019
Iraq and U.S. Policy
Iraq Looks to the Future
Political and Economic Agenda
In 2017, Iraqi officials declared victory in the country’s
The fight against the Islamic State unfolded along several
years-long military struggle against the Islamic State (IS,
ethnic, religious, political, and regional fault lines whose
aka ISIL/ISIS or the Arabic acronym Da’esh), but
contours hint at Iraq’s internal challenges. That fight
unresolved issues involving governance, territorial control,
mobilized Shia Arab paramilitaries (among others) and
resources, and security cloud the path ahead. The May 2018
unfolded in areas inhabited, and in some cases disputed by,
national election for Iraq’s unicameral legislature, the
Sunni Arabs, Kurds, and other minorities. Sectarianism has
Council of Representatives (COR), was carried out without
diminished from its post-2003 highs, but some tensions
major security disruptions, but the election’s disputed
remain. Iraqi leaders have attributed Iraq’s battlefield
outcome delayed government formation. In October, the
successes in part to cooperation among various forces,
newly seated COR elected former Kurdistan Regional
including military and counterterrorism services, local and
Government (KRG) Prime Minister Barham Salih as Iraq’s
federal police forces, PMF volunteers, and Kurdish
President. Salih, in turn, nominated former Oil Minister
peshmerga. It remains to be seen whether such cooperation
Adel Abd al Mahdi, a Shia Arab, as Prime Minister-
will last amid political, security, and territorial rivalries.
designate. Lawmakers confirmed Prime Minister Abd al
Activists and citizens, including in Kurdish areas, stage
Mahdi and some of his cabinet nominees in October 2018.
periodic protests and demand better service delivery and an
As of July 2019, all but one cabinet seat has been filled,
end to corruption. In southern Iraq, related demonstrations
after the COR in June filled long-vacant seats for Iraq’s
since August 2018 have resulted in deaths, injuries, and
defense, interior, and justice ministries.
property destruction.
Tensions between the national government and the KRG
Figure 1. Iraq
persist in the wake of the KRG’s September 2017 advisory
referendum on independence and the subsequent return of
Iraqi security forces to disputed territories. The paramilitary
Popular Mobilization Forces (PMF) created to fight the
Islamic State have yet to be fully integrated into national
security institutions. Groups and individuals associated with
the PMF, some of whom have close ties to Iran, won seats
in the 2018 election. The 116th Congress is considering
proposals for consolidating security gains made in Iraq
since 2014, and conducting oversight into the Trump
Administration’s policies toward Iraq and its neighbors.
After the Islamic State
Iraq’s government declared military victory against the
Islamic State in December 2017, but counterinsurgency and
counterterrorism operations against the remnants of the
group are ongoing. Security conditions have improved since
2017, but IS fighters pose a continuing threat and have the
potential to regroup and escalate insurgent activities. The
Islamic State has not mounted a major comeback to date,
and Iraqi forces, national ministries, and local authorities

Source: CRS, using ESRI and U.S. State Department data.
are cooperating to protect and stabilize liberated areas and
prevent IS reinfiltration.
National and KRG Elections in 2018, Provincial
Elections Delayed
As the Islamic State lost ground from 2015 to 2017, its
fighters left destruction, displacement, and division in their
Iraq held national legislative elections for the 328-seat COR
wake. Explosive ordnance and infrastructure damage
on May 12, 2018. Turnout was lower in the 2018 COR
complicate civilian returns, with volatile interpersonal
election than in past national elections, but the United
divisions remaining between those who fled or fought
Nations Assistance Mission for Iraq (UNAMI) has stated
against the Islamic State and those accused of collaboration.
that it was “largely peaceful and orderly.” Elections for the
Economic and humanitarian conditions remain difficult in
Kurdistan Regional Government (KRG) were held in
many areas, and more than 1.6 million individuals remain
September 2018, and provincial elections have been
internally displaced. Iraqi officials have identified more
postponed, with proposed dates of November 2019 and
than $88 billion in short- and medium-term recovery needs.
February 2020 under consideration.
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Iraq and U.S. Policy
Iraq’s major ethnic and religious constituencies are
requirement that PMF units serve as “an indivisible part of
internally diverse in political terms, as evident in the 2018
the armed forces and be subject to the same regulations” or
election results. A pan-ethnic and pan-sectarian coalition of
disarm. Public U.S. intelligence assessments regard Iran-
interest groups agreed to support the new government, and
linked groups as serious threats to U.S. personnel in Iraq.
differences over policy priorities and leadership preferences
Fiscal Challenges
exist within communal blocs. Prime Minister Adel Abd al
Fiscal shortfalls, reported corruption, and weak service
Mahdi does not lead or represent a single political party or
ministry performance create public investment constraints
bloc, and emerged as a consensus candidate acceptable to
and vex Iraqi decision-makers. Oil exports, the lifeblood of
the Sa’irun (On the March) coalition led by populist Shia
Iraq’s public finances and economy, brought diminished
cleric and longtime U.S. antagonist Muqtada al Sadr, the
returns from 2014 through 2016. Revenue improved from
predominantly Shia Fatah (Conquest) coalition led by Hadi
mid-2017 to mid-2018 thanks to higher prices, but prices
al Ameri of the Badr Organization, the Nasr (Victory)
have again declined, and Iraq has limited its oil production
coalition of former prime minister Hayder al Abadi, and
in line with OPEC decisions. In spite of a 2018 surplus, Iraq
Kurdish and Sunni Arab blocs. Fatah includes several
has turned to lenders and donors for support at a time of
individuals formerly associated with the mostly Shia PMF
increased security and stabilization costs. Iraq’s Standby
militias, including figures and movements with ties to Iran.
Arrangement with the International Monetary Fund (IMF)
The Kurdistan Region and Disputed Territories
and billions in World Bank programs commit it to a set of
Already-difficult relations between the KRG and the
fiscal and administrative reform benchmarks. U.S. loan
national government in Baghdad soured further over the
guarantees and U.S. technical assistance also have helped
KRG’s September 2017 advisory referendum on
Iraq attract billions more in lending to meet pressing needs.
independence. Despite Iraqi, U.S., and coalition requests to
The IMF warns that current spending on wages is expected
delay or cancel the vote, the referendum was held in areas
to contribute to rising fiscal deficits that may crowd out
of recognized KRG authority as well as in disputed areas,
public investment and increase reliance on lending. The
and the results overwhelmingly favored independence. In
KRG has welcomed Baghdad’s resumption of payments for
its wake, Iraqi leaders moved to reassert the national
KRG salaries, but unresolved oil and budget differences
government’s sovereign control over international borders
could renew the region’s fiscal crisis at any time.
with the Kurdistan region and, in October 2017,
Iraq-U.S. Relations
reintroduced national government forces into disputed
territories where they had been present prior to the Islamic
The Iraqi government seeks continued U.S. and coalition
State’s 2014 advance. Intra-Kurdish tensions since have
security assistance to Iraq, including the continuation of
flared, with rivals blaming each other for the loss of control
U.S. military training. U.S. forces are hosted by Iraq
over strategic territories and resources. U.S. officials warn
pursuant to an exchange of diplomatic notes under the 2008
against unilateralism and the use of force by both sides,
U.S.-Iraq Strategic Framework Agreement. Some Iraqis
urge all Iraqis to engage in constitution-based dialogue, and
remain deeply critical of and hostile to the foreign military
do not recognize the result of the referendum.
presence in Iraq, while others express concern that U.S. and
other forces could be drawn down precipitously or become
In the May 2018 national elections, the two largest Kurdish
involved in conflict with neighboring Iran or its proxies.
parties, the Erbil-based Kurdistan Democratic Party (KDP)
Security Assistance and Foreign Aid
and the Suleimaniyah-based Patriotic Union of Kurdistan
(PUK), won nationally significant numbers of seats despite
The United States provides foreign aid and security
stiff but diffuse competition from Kurdish opposition
assistance to Iraq in support of Iraqi operations against the
parties. The KDP won 45 of 111 legislative seats in the
Islamic State, Iraqi security force development, Iraqi public
KRG’s September 2018 election, followed by the PUK and
financial management reform, United Nations-coordinated
smaller parties. Intra-Kurdish differences have delayed
stabilization programs, and other objectives. Reflecting
Iraq’s needs, fiscal
KRG cabinet formation. In July 2019, the KRG parliament
situation, and status as a major oil
confirmed KDP leader Masrour Barzani as KRG Prime
exporter, U.S. assistance to Iraq blends U.S.-funded
Minister. His cousin Nechirvan Barzani is KRG President.
programs with lending and credit guarantees.
The Future of the Popular Mobilization Forces
The 115th Congress extended authority for U.S. train and
Iraq’s Popular Mobilization Forces contributed to Iraq’s
equip programs in Iraq through December 2020. This
fight against the Islamic State, even as ties between some
includes U.S. aid to KRG forces. Congress has appropriated
PMF components and Iran have prompted Iraqi and
more than $5.6 billion for the program through FY2019.
international concerns. In 2016, the COR adopted a law to
The United States has provided more than $265 million in
provide for a permanent role for the PMF as part of Iraq’s
stabilization aid to liberated areas of Iraq through the
national security sector. The law calls for the PMF to be
United Nations Development Program’s Funding Facility
placed under the authority of the commander-in-chief and
for Stabilization (FFS), and President Trump requested
to be subject to military discipline and organization. Some
additional stabilization and aid funds for Iraq for FY2019
PMF units have been integrated, but many remain outside
($198 million) and FY2020 ($165 million).
the law’s defined structure, including some units associated
with groups identified by the State Department as receiving
Christopher M. Blanchard, Specialist in Middle Eastern
Iranian support. U.S. officials have expressed concern about
Affairs
potential attacks by Iran-linked PMF forces and other
militias amid U.S. tensions with Iran. In July 2019, Prime
IF10404
Minister Abd al Mahdi issued a decree restating a
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Iraq and U.S. Policy


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